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Federal agency approves gas pipeline to West Coast

A major pipeline project that would expand the export capacity for locally produced natural gas has received approval from the Federal Energy Regulatory Commission, which also has released draft findings on a second regional pipeline proposal.

The FERC approved the El Paso Corp.‘s 675-mile Ruby Pipeline, which will run from its Opal, Wyo., regional distribution hub to Malin, Ore., where gas could be shipped to West Coast markets.

The $3 billion project still requires some other approvals, including from the Bureau of Land Management. But El Paso hopes to begin construction as early as this spring and put the 42-inch-diameter line into service by next March. It would have an initial delivery capacity of 1.5 billion cubic feet per day.

The FERC also released a draft environmental impact statement for the Apex Expansion Project, which involves building 28 miles of 36-inch-diameter pipeline through three Utah counties. The agency found that Kern River Gas Transmission Co.‘s proposed mitigations and other measures recommended by the FERC would reduce the project’s environmental impacts to nonsignificant levels.

Through interconnecting pipelines, that project would allow for delivery of another 266 million cubic feet per day of Rockies gas to other markets, the West Slope Colorado Oil & Gas Association said in a letter to the FERC.

The industry group is praising both projects for the roles they would play in helping move gas produced in areas including western Colorado’s Piceance Basin.

Lack of adequate export pipeline capacity had been a factor in last year’s drilling slowdown in the Rockies. But that slowdown and the completion late last year of the Rockies Express Pipeline to eastern U.S. markets all but eliminated the capacity shortage, some local producers have said.

Still, West Slope COGA told the FERC additional future capacity will help ease delivery challenges that could arise as production in the region increases.

Companies with local gas development projects, including Bill Barrett Corp. and Antero Resources, have signed long-term contracts to use the Ruby Pipeline.